Trent Ltd Q4FY26 Results: Strong Quarter, Store Expansion to Drive Growth

Trent Ltd, the Tata Group's retail arm operating Westside, Zudio and Star Bazaar, delivered a strong Q4FY26, with revenue growth accelerating to 20% YoY on the back of aggressive store additions even as like-for-like (LFL) demand remained subdued. Margin execution was better than expected, and the announcement of a Rs.2,500 crore rights issue signals the management's confidence in sustained long-term structural growth. Here is our full breakdown of the quarter.

Q4FY26: Headline Numbers

Trent's standalone revenues grew 20.2% YoY to Rs.4,936.6 crore in Q4FY26, ahead of the 16–17% growth achieved in Q2/Q3FY26, and this despite a high base of 29% YoY growth in Q4FY25. Revenue growth was driven almost entirely by retail footprint expansion, with the total retail area growing 30% YoY to 19.1 million sq.ft. On our calculation, revenue per sq.ft. declined approximately 6% in Q4FY26, reflecting the LFL softness discussed below.

Gross margins improved by 171 bps YoY to 44.3%, aided by a better product mix and lower discounting — the company has not adjusted prices to adapt to short-term demand trends, which supported margin quality.

EBITDA grew 38.2% YoY to Rs.919 crore, with EBITDA margins expanding 242 bps YoY to 18.6%, driven by gross margin improvement and a 15%/21% decrease in employee cost per sq.ft. and rent per sq.ft. respectively.

Strong operating performance was partially offset by higher depreciation (up 37.6% YoY due to new store additions) and lower other income, resulting in adjusted PAT growing 30.1% YoY to Rs.454.8 crore.

FY26 Full Year: Performance Summary

For the full year FY26, Trent's standalone revenues grew 18.2% YoY to Rs.19,701.4 crore. Accelerated store additions and increasing retail footprint were the primary growth drivers, with LFL growth remaining in low single digits throughout the year.

Gross margins held flat at 44.5% for FY26. EBITDA margins improved by 197 bps YoY to 18.5%, largely aided by the integration of RFID technology across the supply chain — improving operational control and store-level productivity — and by linking staff costs and occupancy costs (including rentals) to store performance. Operating EBITDA for the year grew 32.3% YoY to Rs.3,643.3 crore.

Depreciation was higher by 51% YoY due to accelerated store additions. As a result, adjusted PAT grew 25.4% YoY to Rs.1,986.9 crore.

Demand Environment: Consumer Caution Persists

Consumer sentiments remained relatively stable at the start of Q4FY26 but softened as the quarter progressed. Geopolitical uncertainty — particularly the Middle East conflict — is weighing on discretionary sentiment, with higher uncertainty around inflation, cost of living and macroeconomic conditions contributing to cautious spending behavior.

LFL growth for Q4FY26 stood in low single digits, and we expect this to remain muted in the near term given the macro backdrop. However, Trent's growth model is not structurally dependent on LFL recovery in the short term — store additions remain the primary growth engine and provide revenue visibility even in an environment of subdued same-store performance.

Store Expansion: The Growth Engine

Trent added 23 Westside stores and 109 Zudio stores in Q4FY26 alone. As of Q4FY26, the total store count stood at 1,263 stores — Westside at 300 stores (7.3 mn sq.ft.) and Zudio at 963 stores (10.4 mn sq.ft.). Total store area stood at 17.7 mn sq.ft.

For the full year FY26, the company added 52 Westside stores and 198 Zudio stores — a meaningful acceleration in network rollout.

The geographic mix of expansion is particularly notable. Approximately 80% of new Zudio stores opened during the year were in Tier II and Tier III cities and emerging micro markets, aligning with regions demonstrating stronger economic growth and underpenetrated retail opportunity. Trent continues to simultaneously deepen store density within existing Tier I and Tier II catchments while expanding into smaller markets.

Going forward, we expect the company to add approximately 30–40 Westside stores and 180–190 Zudio stores in the coming years, sustaining the momentum that has driven topline growth.

Rights Issue: Rs.2,500 Crore Capital Raise

The board has approved an in-principle proposal to raise Rs.2,500 crore through a rights issue (or other permissible modes), subject to requisite approvals. The stated objectives of the fund raise are: (i) upgrading the existing portfolio of stores, (ii) expanding into new geographies, categories and brands, (iii) expanding and automating warehousing and supply chain facilities, (iv) accelerating digital capabilities and automation, and (v) aiding a faster rollout of Star stores, including select investments in retail real estate developments.

The scale of the capital raise is consistent with management's stated confidence in long-term structural growth and their intent to continue investing aggressively through the current phase of expansion.

Supply Chain: Domestic Sourcing Provides Insulation

Geopolitical uncertainty is creating supply chain pressures — select raw material inputs are witnessing inflationary pressure and labour availability for suppliers has been impacted. However, Trent's higher domestic sourcing base provides meaningful insulation. The company is managing the situation through calibrated sourcing actions and broader supplier agreements, and its diversified supplier base helps maintain product availability across business channels.

New Channels and Adjacencies Scaling Well

Emerging categories — footwear, beauty & personal care, and innerwear — contributed 21% to fashion business revenues in Q4FY26, indicating sustained and meaningful diversification into adjacencies beyond core apparel.

The online channel continues to scale profitably, supported by traction on the Tata Neu platform. Online channel revenues grew 25% YoY in Q4FY26 and contributed approximately 6% to Westside sales. Trent's omnichannel model ensures consistency in product offerings, pricing and promotions across physical and digital channels.

Operating Leverage: RFID and Variable Cost Structures

Two structural features are helping Trent manage operating leverage efficiently even through a period of aggressive expansion.

First, the company has rolled out RFID technology across its supply chain, enabling better operational control and store-level productivity. This has helped contain manpower costs despite a significant increase in store count.

Second, Trent has structured a meaningful portion of its cost base to be variable alongside store revenues — including some occupancy costs (rentals) and fees to business associates that carry variable payout structures. This design reduces downside margin risk during periods of demand softness.

Competitive Intensity: Managing Through Own Brands

Management acknowledged that competitive intensity in Indian retail remains high, given the diversified and fragmented nature of the industry. Trent manages this through its own-brand model and direct-to-consumer distribution, which structurally limits dependence on third-party brands and provides pricing and margin control. The company continues to focus on product premiumisation and adaptation to on-trend fashion, aligned with consumer demand evolution.

Star Bazaar: Steady, Under Reconstruction

Star Bazaar (the hypermarket business) reported revenues of Rs.850 crore in Q4FY26, up 6% YoY, and Rs.3,494 crore for FY26, up 2.6% YoY. Revenue was partially impacted by store refurbishments and consolidation. Total Star Bazaar store count stands at 84 stores across approximately 1.4 mn sq.ft.

The own-brand share in Star Bazaar stood at 73% in Q4FY26. The fresh division gained portfolio share while General Merchandise and Apparel witnessed a 100 bps YoY decline. Incremental investments will continue in Star Bazaar as well as in new brand initiatives such as Burn Toast.

Corporate Action: Bonus Share Issuance

Trent has announced issuance of bonus shares in a 1:2 ratio — one equity share for every two equity shares held — subject to shareholder approval. This will increase equity shares by 17.7 crore shares, from 35.5 crore to 53.2 crore. The company will use Rs.17.7 crore from its share premium of Rs.1,924.3 crore for the bonus issue.

Estimate Revisions

We have broadly maintained our revenue and EBITDA estimates for FY27E and FY28E. PAT estimates have been trimmed modestly for both years to account for higher depreciation arising from accelerated store expansion ahead.

Metric	FY27E (New)	FY28E (New)
Net Revenues (₹ crore)	24,072.8	29,723.7
EBITDA (₹ crore)	4,504.1	5,683.8
EBITDA Margin (%)	18.7	19.1
Adjusted PAT (₹ crore)	2,340.8	2,981.6
EPS (₹)	65.8	83.9

We expect Trent's revenues, EBITDA and PAT to grow at a CAGR of approximately 23%, 25% and 22% respectively over FY26–28E.

Key Financial Summary (FY23–FY28E)

Metric	FY23	FY24	FY25	FY26	FY27E	FY28E
Revenues (₹ crore)	7,715	11,927	16,668	19,701	24,073	29,724
EBITDA (₹ crore)	1,119	1,927	2,754	3,643	4,504	5,684
EBITDA Margin (%)	14.5	16.2	16.5	18.5	18.7	19.1
Adjusted PAT (₹ crore)	555	1,070	1,585	1,987	2,341	2,982
RoE (%)	19.1	28.4	30.6	29.2	26.7	26.6
RoCE (%)	14.3	24.1	29.3	27.9	27.2	28.3

Key Risks

Two risks merit ongoing monitoring. First, a slowdown in discretionary consumption impacting LFL growth — near-term geopolitical and inflationary headwinds could delay any recovery in same-store sales. Second, increasing competition from large domestic and international brands in the fast fashion segment, which could pressure market share and pricing dynamics over the medium term.

Frequently Asked Questions (FAQs)

Q1. What was Trent's revenue growth in Q4FY26? Trent's standalone revenues grew 20.2% YoY to Rs.4,936.6 crore in Q4FY26, accelerating from the 16–17% growth recorded in Q2/Q3FY26. Growth was primarily driven by store additions rather than LFL improvement.

Q2. How did EBITDA margins perform in Q4FY26? EBITDA margins expanded 242 bps YoY to 18.6% in Q4FY26, driven by a 171 bps improvement in gross margins and significant reduction in employee and rental costs per sq.ft. For the full year FY26, EBITDA margins improved 197 bps YoY to 18.5%.

Q3. How many stores does Trent operate as of Q4FY26? As of Q4FY26, Trent's total store count stood at 1,263 stores — 300 Westside stores (7.3 mn sq.ft.) and 963 Zudio stores (10.4 mn sq.ft.). Total retail area stood at 17.7 mn sq.ft., up 30% YoY.

Q4. What is the purpose of Trent's Rs.2,500 crore rights issue? The fund raise, approved in-principle by the board, is intended to be deployed across five areas: upgrading existing stores, expanding into new geographies, categories and brands, expanding and automating supply chain and warehousing, accelerating digital and automation capabilities, and aiding faster rollout of Star stores.

Q5. What is Trent's LFL growth trend and outlook? LFL growth stood in low single digits in Q4FY26, in line with the trend across Q2 and Q3FY26. Consumer discretionary sentiment remains cautious due to geopolitical uncertainty and inflationary concerns. LFL growth is expected to remain muted in the near term. Revenue growth is expected to be sustained primarily by continued store additions.

Q6. How is Trent managing supply chain risks from geopolitical uncertainty? Trent's higher domestic sourcing base provides significant insulation from import-linked disruptions. The company is also employing calibrated sourcing actions and broader supplier agreements. Its diversified supplier network helps maintain product availability across channels.

Q7. What is the Zudio expansion strategy geographically? Approximately 80% of new Zudio stores opened during the year were in Tier II, Tier III and emerging micro market locations. This strategy aligns store additions with regions demonstrating stronger economic growth and significant retail underpenetration, complementing continued expansion in Tier I cities.

Q8. What is the bonus share announcement? Trent announced a 1:2 bonus issue — one equity share for every two held — subject to shareholder approval. This will increase total equity shares from 35.5 crore to 53.2 crore.

Q9. How is the online channel performing? Online channel revenues grew 25% YoY in Q4FY26, contributing approximately 6% to Westside sales, supported by growing traction on the Tata Neu platform. The omnichannel model ensures consistent pricing and product offerings across physical and digital touchpoints.

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